A couple in Boise, Idaho is ready to retire – perhaps to idyllic Sun Valley. They think about listing their home in the city. They know they can get their price. But they hold back. They are still waiting – and not because of coronavirus concerns. They are holding back because, with few properties available in their target area, they ask themselves, ‘if our home sells as quickly as most, where do we go from here?’
“It’s a fact of life,” said Idaho broker Tracy Kasper, co-owner, Berkshire Hathaway HomeServices Silverhawk Realty. “With less than a three week inventory on hand, it’s a primary concern for sellers, who understand that current demand is far greater than supply.”
It’s a scenario playing out all across the country: with demand high and inventory low, potential sellers are staying put because they fear they may not be able to find the home they want before they have to vacate their present home.
“People need to move,” noted Helen Hanna Casey, CEO of Pittsburgh-based Howard Hanna Real Estate Services in Pennsylvania, the nation’s largest independent home seller. “Lifestyles are changing, largely as a result of this pandemic,” she said. “People are able to work from home, they are fleeing the cities for the suburbs. In some cases, empty nesters out in the suburbs want to come back into the city. The fact is, there’s a growing demand for choice, and not enough supply to make it happen.”
Sales volume is up in most markets, and in most price points, brokers say.
“Homes are selling so fast here that we are seeing bidding wars on million-dollar properties,” said Sheryl Chinowth, co-founder, Chinowth & Cohen Realtors, Tulsa, Okla., where sales volume is up some 42 percent this month – an increase of more than 17 percent over the firm’s July sales volume a year ago.
“Even with COVID cases on the rise here” said Chinowth, “both buyers and sellers know we are operating under very strict safety protocols. They feel safe, and so rock-bottom interest rates and the need or desire to move are fueling a buyer frenzy.”
Job uncertainty in the midst of pandemic varies from market to market.
“There is definitely a divided economy,” noted Casey. “Some people are struggling to make ends meet, and we don’t know how many furloughed restaurant and hotel workers will be back on the job, or how long that may take.”
At the same time, she said, the high-end market is ticking up, so that her firm, which was headed toward its best year to date before the coronavirus came to town, is still on track – assuming mortgage rates stay low – to end the year ahead of last year.
Unemployment is rarely a problem in Tulsa, said Chinowth. “Despite some concern about airline layoffs, we have big industries moving in and lots of start-ups, and we typically have more jobs than we have applicants. Our concern is finding enough housing to fill the need.”
In Idaho, there is similar concern.
“This is not a speculative market,” said Kasper. “Fifteen buyers are currently competing heavily for three lakeside lots in the country. Bottom line, at the current rate of business, we expect to be 25 to 30 percent up over last year in sales volume. But we need to bring in more sellers to stand a chance of leveling out.”
In many markets, new construction is lagging.
“We have horrifically low inventory in the greater Las Vegas market and there’s not nearly enough new construction going on to help meet buyer demand,” notes Mark Stark, CEO/owner, Berkshire Hathaway HomeServices Nevada Properties, the eighth largest in the company’s national network of 677 franchises. “That makes for more demanding sellers, too, because they know they can have their pick of pre-approved buyers with no contingencies who are willing to pay top dollar for a property.”
So, where do we go from here in this busy summer market driven by low rates, lower inventory, and buyers inspired to re-think their lifestyles and priorities in the age of COVID-19?
“Properties haven’t gone anywhere,” said Stark. “They just are not easily accessible – and people sitting at home checking the internet are confused. As brokers, we need to do a better job of letting buyers know that just because they don’t see listings on the MLS, that doesn’t mean we can’t help them find the home they’re looking for.”
In the high-end market especially, Stark said, where virtual home tours have been in wide use even before the pandemic, some sellers are now updating and renovating their homes in order to improve their value to selective buyers.
“We are developing new strategies every day,” said Stark, “working to increase inventory and help sellers answer the question, ‘Where do we go from here?’